Hello,
From your symptoms it can be a sebaceous cyst. A sebaceous cyst is a closed sac occurring just under the skin which contains a "pasty" or "cheesy" looking substance called keratin. They may occur anywhere on body but scalp, ears, back, face, and upper arm, are common sites for sebaceous cysts. Blocked sebaceous glands, swollen hair follicles and excessive testosterone production will cause such cysts.
Generally no treatment is required but they become painful then it means they are infected, then surgical excision by traditional wide excision, minimal excision, and punch biopsy excision may be required.
It is very difficult to precisely confirm a diagnosis without examination and investigations and the answer is based on the medical information provided. For exact diagnosis, you are requested to consult your doctor. I sincerely hope that helps. Take care and please do keep me posted on how you are doing.
Could it be possible for this piece of skin that is fresh looking to be a skin bridge that was connected to the penis head/ top frenulum area but through puberty came off and the skin on each side has just overlapped it